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Friday, July 1, 2011

postheadericon Microsoft rumoured to buy RIM

If you're a stockbroker with an enormously large stake in RIM, which see their value fall were, you 'd by the idea of ??Microsoft buying the Canadian company to be thrilled. Even if your idea in the first place.

The rumors about Microsoft wanting to buy a handset maker - First it was Nokia, then it wasn 't had it - have been back on the road. Look here on Bloomberg:

While Jim Balsillie and Mike Lazaridis, RIM 's Co-Chief Executive Officer, said last week that its commitment to RIM' stronger than ever before, "the company can win now, Microsoft and Dell, said BMO Harris Private Banking . A buyer would be a smart phone manufacturer, still dominant among business customers, which offers greater security with its own e-mail servers, and generates more free cash versus its market value than any of his rivals. Paying $ 40 a share more values ??with RIM a discount to comparable companies in the industry.

Wow, that 's powerful logic - Microsoft has a lock on the corporate business, and look at RIM' s market capitalization fell from C $ 84.3bn in June 2008 to only C $ 13.3 today - its lowest level since the iPhone (the disturbance of the overall smartphone market) has been announced. And 40 dollars per share? Why, then 're trading at U.S. $ 28 - we' re in the money!

But it 's also complete nonsense. Why Microsoft should sign a contract with Nokia, which will cost billions and in the skills they swap back and forth in one of the closest it has ever been covenants in mobile, if it went to a handset maker to buy? And guess what - Microsoft already has a handset maker. Everyone has forgotten that Microsoft bought Danger in 2008 and went so far as to manufacture phones (not the respondent children) as a result?

Microsoft already has the skills in-house. And sure RIM could purchase a couple more of showing off the billions that have been burning a hole in his bank account. Except that Microsoft is a software house, and it 's the implementation of their bets on software such as Skype and Windows Mobile and buying RIM would be what to call stockbrokers "catch a falling knife" - so try to get it on the way down. Steve Ballmer is a good dealmaker. It wouldn 't to, to go.

As with Dell - true, it 'sa hardware company, but it' s on Android in phones and RIM takeover would be fraught, with all the problems inside RIM (such as trying to change platforms, while the BB6 existing platform to smolder, why should it want to fight? The price would probably push it into a cash-and-shares (or shares and debt) to buy, which wouldn 't be good. And the maxim of falling diameters, it is also true.

So why on earth is this being floated as an idea by a stockbrokerage?

"Given how significant the deterioration of the stock price, but that \ lead interest rates," said Paul Taylor, the $ 14500000000, including RIM shares serves as chief investment officer at BMO Harris in Toronto. "RIM still has meaningful market share in the U.S. and meaningful market share internationally, and RIM has a cult brand."

Or, to put the question differently: What are the reasons it could possibly be a stockbroker, that drop their interest in RIM's seen making up 33% over the past two months by the proposal, it could be an acquisition on the way to be 50% premium to the current share price of RIM, who tend to buy the man's head back into the market to RIM shares (the upward price pressures) would begin before the takeover?

We 're sure we can' t think of any.

Charles Arthur

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